What happens when a fixed rate deal comes to an end?

cal1_2

Hi Everyone

I am asking a query on behalf of my cousin, and wondered if anyone knew the answer please? I will give you some background on her situation.

She is a single mum to a gorgeous little boy and has a mortgage with Brittania. She is on a fixed rate deal which finishes (approx) January 2009. When she applied for the mortgage, she worked 30 hrs per week. She has been going to college to train as a teaching assistant. The school where she was working as part of her training have asked her to go for a job that is coming up, and she really wants to! However, the hours are (she thinks) 24 per week term time which averages at 18 per week over the year. She will be still entitled to working tax credit etc and she will be able to afford her mortgage, because her childcare fee's will reduce also. She will have more quality time with her son.

She would really love to go for this job but when the fixed rate deal ends in 2009, will they look into her salary again? It will have reduced since she initially applied for the mortgage and if she were to apply for a mortgage on her reduced hours today, she would fall short of the amount required (we have been on the Brittania website) to actually get a mortgage. If she was approved for the mortgage 5 years ago, will she need to be approved again in 2009 if she stays with the same lender?

I don't know whether I need to point out, but she has never defaulted on any of her bills (including mortgage), she is sssoooo careful with her money and would not even think of going for this job if she was not 100% sure she could afford the payments. Will she need to be approved again in 2009 or will they just offer her the best deal at the time?

Thanks for all your help
Kind regards,

smartmove07

I am may be wrong but am pretty sure that if she intends to stay with her current mortgage provider then credit checks etc. wont apply. However, if she wants to move to a better deal elsewhere she will need to go through credit/affordability checks all over again.

Jonbvn

Hi,

The important thing is that when the fixed rate ends, she does not go onto a SVR mortgage. With a view to her changed circumstances, it may be best to stick with her current lender. However, if they fail to offer her a good deal, it would be better for her to remortgage with another lender.

Unfortunately, if your friend remortgages, the usual credit and employment checks are made.

HTH.

sarkin

If she is not looking to change lenders then there will be no credit check. As others have said make sure you have something inplace for when the deal finishes as the SVR will be high. Dont foget to ask for any fee free deals.

silvercar

Some lenders are not very good at offering new deals to existing customers. In fact, some lenders offer no deals to new customers at all. Something I am bearing in mind when I'm looking for my next deal; I want a lender who will allow me access to their remortgaging deals, otherwise I am committing to moving my mortgage every few years.

cal1_2

Thanks everyone for your replies:T
I will let her know your responses - I think she will take the job. I will also remind her to look into another deal when her fixed rate finishes, so she doesn't go on the SVR.:D
xx